Posted on 01/14/2018 7:49:22 AM PST by RoosterRedux
Fiat Chrysler will make Ram trucks in Michigan instead of Mexico beginning in 2020, and the company says this will mean 2,500 extra jobs at the plant in Warren, Detroit’s largest suburb.
While this isn’t the first bit of good economic news in the wake of big corporate tax cuts Republicans just passed, it’s the one that cheers us the most, because it best reflects the way lower corporate taxes work.
The key is not bigger profits but increased competitiveness.
*snip*
More companies will set up more business in the U.S., because it’s now easier to compete by doing so.
Mexico has a 30 percent corporate rate. When the U.S. had a 35 percent rate, it made sense for Chrysler to make its profits in Mexico. Now the U.S. rate is 21 percent. Labor is still much cheaper in Mexico, but Chrysler weighs the pros and cons of where to manufacture, and the U.S. is suddenly much more appealing than it had been before the bill passed.
Lower tax rates aren't the only reason to move a plant to Michigan. Better energy infrastructure, a more educated workforce, and a better legal system all weigh on that side of the scale. But reducing the tax rate from 35 percent to 21 percent weighs heavily, and in many cases, it will tip the balance in favor of America.
So cheers to Fiat Chrysler. May it be the first of many.
(Excerpt) Read more at washingtonexaminer.com ...
If I’m in the market for a truck in a few years, manufacturing here would be a consideration... But I’d probably still by a Ford.
What??? Paul Krugman, Leftist economist to the stars, said this would never happen, as did the smartest man ever, Barry Obama. How could they be so WRONG?
I wonder if the new-hires in those plants aren’t going to be coming in at an all-time low rate of pay.
So? The pay rate at GM before Obama stole the company was an average of $68 per hour with all the benefits.
Someone needs to tell me why $68 an hour was reasonable to ‘assemble’ a mostly plastic car. I worked at American Motors in the late 50’s & early 60’s. At least those cars were steel.
Another case of how democrats get everything wrong.
Good point!
As a bonus, Michigan is also a RTW state now.
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